anncr vo: ...you can get help gwith a flat tire.... anncr vo: ...find a nearby tow truck or gas station... anncr vo: ...call emergency services... anncr vo: ...collect accident information. anncr vo: or just watch some fun videos. anncr vo: it's so easy, a caveman can do it. caveman: unbelievable... caveman: where's my coat? it was suede with the fringe. vo: download the glovebox app free at geico.com. let's tell you a little bit about what we now know about the situation in haiti. citigroup is trying to account

for some 40 employees who were working in a three-story building in port-au-prince, which collapsed apparently yesterday. troubles at the port, they can't get in and out. american airlines and delta say they have canceled flights for the time being into and out of this country. obviously, this is a very fluid situation with certainly many, many deceased individuals. >> all right. coming up at 2:00 p.m. eastern time, the beige book, its regional report. the market will be watching it very closely and watching for any comments about the dollar, inflation, exit strategy, all of that. >> it will all be beige. that's it for "power lunch." >> we'll see you tomorrow. street signs with erin burnett begins now. >> and everyone welcome to street signs xwk. we're seconds away from breaking news from the fed. then the newly-crowned fund

manager of the decade, plus barney franks potential new tax on bankers. a big money celebration in beijing tonight and what you can do to help this crisis from becoming a long-term tragedy. steve liesman. >> the beige book, the collection of and dotes from the fed saying there's been further economic improvement from low levels of economic activity. ten districts reported gains versus eight in the last report. let me give a little context here. we made a shift up from contracting to being steady and then modest growth, not really shifted up much from that modest growth reported in the last report. christmas spending just beat '08 far below 2007 levels however. auto sales and manufacturing were both seen as steady to higher throughout the districts. manufacturers were more optimistic but remain cautious in spending on new capital items. here was an interesting one. home sales increased in most districts. i can't remember seeing that one before especially for lower

priced homes seem connected to the revival of the tax credit out there in the latter half of the month. commercial rale still weak in almost all districts and vacancy rates high, as well. loan demand declines and credit quality continues to deteriorate. don't look for any rebound in lending from as a result of this survey. labor market was still seen as weak and price pressures subdued. there were a few positive signs in the beige book i've hi highlight ford you. the job market was weak but a modest hiring pickup in new york. some service sector hiring in st. louis, temporary hiring in the richmond district. the boston district reported some pay gains. those were the positive bullet points on the job market that was otherwise seen as weak. there were also some interesting bullet points on tourism. we don't talk enough about it. on broadway, ticket sales were seen as weaker than in 2008. atlanta is resting its hopes on the nfl. that's the miami are where the

super bowl is -- part of the atlanta district. they saw strong 2010 cruise line books. dallas is saying the airline demand is recovering. fares were stabilizing and for reasons unclear to me, hawaii and vegas seeing more tourists. those were two pieces of positive news. it feels like we plateaued up. and now we're bouncing along ever so higher but no huge gains. >> hawaii and vegas, they don't tell you where they're from. obviously, plenty of asians go there. we don't know the. >> what i hope is the story when it comes to the job market is some of that little bits of positive news is something that might be a harbinger of better news in the job market. >> well, steve liesman, thank you very much and the market's up 46. we're still positive as we were before. let's talk more about the beige book and for that, we bring in the fixed income manager of the

decade, pimco cochief investment officer and founder bill gross. we do have video of you ten years ago. >> oh. >> which was bill then and now. over ten years. we'll bring that up at some point during the segment. let me get your reaction to what steve had to say first. christmas spending far below 2007 but above actually. hey, a lot fewer americans are employed this year than last year. maybe that's not all bad. >> we're moving in a positive direction. i would point out from a pessimist standpoint that the last decade of wilpimco was the manager of the decade, was a jobless decade as opposed to the decade before that which was a 15 million job creation decade. what we need to do is produce some jobs in order to get the economy going. unless we do, the consumer is going nowhere and they're not going to vegas or to hawaii very much either. >> christina romer saved we've

saved or created two plus million jobs due to the stimulus program i'm sure she would be the first to admit they don't know exactly. do you think the guess is anywhere near the truth? >> i think it probably is close to the truth. the things that have been done via the federal reserve and stimulus packages have avoided the, let's be honest about it, a near depression. so we've saved a lot of jobs. is the fault with the administration in my opinion and in pimco's opinion is that they haven't focused specifically on job creation and that you know, that's a 12 to 18 to 24 month type of thing. it will be sometime coming here. >> 12, 24, 18 months. are you sticking with your sense that as you spoke just a few days ago, the fed will not be raising interest rates this year and you still yields in the ten-year are going up 40 to 50 basis points.

>> yes, i do think that once the fed stops writing checks which is what they suggested they'll do in march, that perhaps 20 or 30 basis points higher would be the ultimate direction of interest rates wherever they are in march. >> okay. so from march. understood. so the other thing, steve pull pulled out of this, of this beige book and i know you've been -- you're obviously not -- you say you're -- he pulled out these few things, not just the tourism to vegas and hawaii but temporary hiring in richmond, pay gains in boston, modest hiring pickup in new york. home sales increase in most districts. if you take all that together, it sounds like we really, i mean really are moving in the right direction, not sort of sporadically but consistently. >> i think we are. we have positive growth in terms of gdp and we will have positive growth in terms of job creation. the critical question becomes in terms of unemployment and the

partially unemployed which is close to 16 to 17% of the labor force is the number, and we need basically 250,000 jobs a month. we're far from that at this point in order to bring down the unemployment rate. that requires from my standpoint a specific bulleted government jobs program that puts people to work and not just as census workers but doing something that's creative and productive and long-lasting. >> census is going to help though. that's a million or two million jobs. i know it's temporary but do you get that. when you talk about a bullet pointed jobs plan, that's the holy grail. what would be your top two bullets to have it work? >> well, to create programs that specifically incentivize the private sector to create jobs. that would be tax benefits and the like and to bullet the government in terms of a, know,

an rfc, reconstruction finance corporation type of program, ala the 1930s. the obama administration has not been creative in terms of making government work for main street. i think they need to begin to do that. let's use the private sector but let's use the public sector to produce a 250,000 a month job creation economy. >> and put a target on it. one brief question before we go because this headline just crossing. s&p downgrading california's bond rating again. california munis, buy, sell or hold? >> well, i wouldn't buy them. i wouldn't buy most municipals because you know, their deficits are in the 200 to $300 billion for a two-year time frame camp. that's a lot of deficits. and that has to be closed via, yes, the government spending programs that have been part of the past 12 months months. we need to see it again. to a certain extent, the

governornator was right because california and other states are paying a huge burd in terms of medicaid. they need relief there. until they do, the fiscal stability of california and other states is at question. >> thank you very much, bill gross. the other thing everybody is talking about today is, well, remember the plan of a 90% tax on bonuses? there may be more taxes on the way. it is on the front burner for everyone right now. calling a house committee hearing to focus on top compensation for executive boards in the fshlt industry. that is barney frank. tomorrow the president will unveil his plan for taxing the banks. taxes everywhere you look. joining us is lou breen and we appreciate it. >> david, let me get your point of view. barney frank said he would support this tax on the banks that already paid back the t.a.r.p. so they could make good

for the t.a.r.p. money we don't get back from gm and aig and we have more taxes on individual bankers although a transaction tax which you loath and despise seems to be off the table. are you all right with the other taxes. >> absolutely not. at the end of the day, the more we continue to blame the banks for all our ills it's the greater risk of reregulation, going forward and cutting off capital flow to individuals, small businesses and corporations at a tile when they need it most. if you're going to continue to regulate the banks and increase regulation and taxes on the banks, you're disincentiving them to lend out the money. right now we need to be lending out this money. i think they're completely off base trying to target this. i think it's more of a political move than any kind of strategic move to help out our financial industry. >> lou, look at this objectively. dave just made a point it seems fair if you're going to tax whether it's $100 billion, $120

billion of upper taxes on citi, morgan stanley and goldman sachs and maybe wells, right? >> right. >> over several years, is that amount of money going to curtail their lending? >> i doubt it's going to curtail lending as steve noted from the beige book, loan demand is weak and the loan quality is falling. i think that those taxes will probably end up going to the being burdened by the customers anyway at some point. so no, i don't think it's all that big a deal when you talk about $120 billion for the largest banks over five years. i do think it sounds punitive. i do think that it's something that is a populist move than really trying to figure out the best way to get our budget balanced again. at some point, you would think there's going to be some kind of higher taxes and you would hope that would occur as business starts to do better. >> david lutz, it's amazing this issue doesn't seem to go away.

we were hearing the testimony today. david faber spoke to a lot of ceos when they stepped off the podium, they all have supposedly reformed their compensation programs but it doesn't seem to be enough. barney frank is holding another hearing on executive comp. >> it's not going to be enough until this is off the front page. one thing you don't read about, the fed just made a record profit from all those emergency actions. they made over $46 billion in interest off of what they lent out to the banks. the banks are paying back the t.a.r.p. if you want to deal with this problem, you need to deal with removing some of the leverage the banks have and take a look at things like bringing back -- separating the commercial banks from investment banks. a lot of people are saying, and i know jamie dimon said those arguing that bear stearns was more of a stable entity jp morgan. nobody is saying that. if jp morgan was as deep in the

leverage game as citigroup, that would have been a program. >> jp morgan was crying in their soup because they got in so late. >> absolutely. at the end of the day, lehman brothers failed. it was terrible for everybody in the industry. main street went on. nothing happened negatively to main street. if citigroup failed or jp morgan failed, you would have a run on the banks right now. if you want to take care of the structural issue and firms like steeple will benefit from it, take away the leverage the investment banks have, take away the depositors balance sheet and reducing the leverage will reduce bonuses going forward and reduce risk in the system. >> final word, lou, would you agree we do need reform in executive compensation? by that i'm referring to executive compensation, not just in the banks. >> i don't know what kind of reform you want. i don't think i want the government deciding how much someone is getting paid. in the big picture, you've heard this stat thrown out a lot about

the bifurcation of wealth about how in the 60s the ceo of a company was making 30 times what his workers are, and now it's 400 or 500. there's something gone an skew over the longer term. that's a real problem. right now the stuff with the banking and maybe the small improvement we've seen in the economy is lulling washington to sleep as though this is the most important thing to do. as bill gross said earlier this last decade and with the revisions we'll get on the payrolls next month will be a lo losing decade for jobs. the previous worst was in the 1990s as a percentage of growth was 16.7 and we're going to have a loss this year. there's bigger issues to be fried. >> thank you very much. we appreciate bowing of your taking the time. mr. frank will be our guest later this week. straight out to the trading floors. bob pisani, scott are both in their places. bob, your take on the beige book all? >> yeah, i'd say it's pretty

modest. very slow, modest improvement but not a lot of big things to grow about. read that carefully and you'll see they're very, very subdued in their commentary. just want to talk about the banks here. they're leading the markets higher. bank of america, morgan stanley. two comments from the street. one is outright dre derision the big banks who paid back the t.a.r.p. are going to be penalized when the auto companies and aig are left out of these. number two, a lot of traders passed around mike mayo's commentary, the only analyst that testified at the hearings and he slammed the banks. take a look at his testimony. he said wall street's done an incredible job of pulling the wool over the eyes of government and the others. he talked about the need for bankruptcy and talked about accounting standards. let's look at big health care stocks. merck is doing well. new high for the drug index

today and also hma had very positive comments as well raising their estimates. finally, we've had positive comments on some of the other groups. a number of the energy stocks, a bit on the downside as oil has been down two days in a row. how we looking at the nasdaq. >> bob, we're positive. a pretty good day going. up 0.8 of 1%. google shares off by 1%, company apparently considering pulling out of china over censorship. take a look what's happening with baidu shares. up 13%, a move of 50 bucks. stock upgraded by a couple of firms, as well. yahoo! microsoft getting a little bit i've pickup there. yahoo! shares up 1.5%. most rim is up 3.5%. dell is having a pretty decent day. netflix has a deal with nintendo.

stocks up 3% there. qlogic, the stock is down just about 3%. back to you. >> thanks very much to you, scott wapner and bob, too. next, you could be finch if you thought only one person was testifying on capitol hill today on the crisis. the man who said he does god's work might have lost his voice from talking so much. you see him speaking there. there he is. the fireworks, the interviews, and the cramer take next. and what do you do when you're losing a big race and you're ashamed? this is the biggest race of the year? do you fake a leg break? why is google really thinking about bailing out of the race to be top dog in china?

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it's been a long day for wall street's biggest bank ceos, all of them testifying before the financial crisis panel on capitol hill. who knew what and when? jim kram ser here to talk about it along with david faber from washington. david was in the room. i was thinking of in that room. there were good moments and then david had a chance to speak to a lot of the ceos exclusively. what was your take away. >> interesting start. i think some of the panelists showed they have a bit more knowledge of the subject than do typical members of the congressional panel. and obviously, that focus on

goldman sachs. as you mentioned, i did get a chance to sit down with jamie dimon, very briefly with the phil angelides. as for dimon, so much of what the commission is focused on is the idea of too big to fail and systemic risk. i asked him, isn't the size of an institution in part a predictor of potential systemic risk? >> it's not size alone which is an sneevl but a company like yours which is system cliff great importance that also takes consumer deposits that have insurance interest the federal government, why should it be able to leverage bets with that government insured money. >> you've race add important point. we believe and i think almost everyone there said it no firm should be too big to fail. but in the new world, the regulators need more authorities to deal with failure so we think had they had the right authorities they could have dealt with lehman and aig in a

better way. the american public doesn't care if we fail. they care if we fail and it hurts them. >> there's been a lot of questioning whether everybody would have failed had the federal government not come to the aid of the financial system. dimon is not willing to say jp morgan would have failed and defends whether or not they needed t.a.r.p. in the first place. >> in our world, we make everything binary. i think it's a mistake. it's not binary. there were people who would not have fived with it and people who didn't need it at all. we did not need t.a.r.p. at all. >> as you mentioned, lloyd blankfein, somebody who can chose not to sit down for an interview with us. was the subject of the first 45 minutes of questioning. none of the other members of the panel got a question. angelides focused on blankfein and so did some of the other panel members. one key question he got was in reference to an answer he had

given earlier. what were the risks, what were the things that he saw that ultimately goldman sachs wishes had it done differently. >> i think we in our behavior got up, got caught up in, and this is a general market, i'll get specific in a second, got caught up and participated and therefore, contributed to elements of froth in the market. so for example, in leveraged finance, which was our biggest exposure, we are a top service provider to the private equity world. we are a top mergers and acquisition firm in connection with rendering that advise for mergers and acquisitions. we help finance those transactions. increasingly, those transactions took on higher and higher leverage which they could not have but for the willingness of financiers to participate in that and we were a major financier. >> and that was one of the areas where in fact goldman sachs did take losses. i also had a chance to ask phil

angelides as to why so much focus on blankfein. >> this is the start of our inquiry, not the end. i think that look, there's a lot of questions for all these individuals. and over the course of the next few months, we'll do hundreds of interviews. it is highly likely that these folks will be back at individuals at which point we can ask more questions. we'll be an equal opportunity questioner. >> back to you. >> i have one question for you and then i want to get a reaction from jim. he said he's going to be doing hundreds of interviews. are all of those going to be publicly seen or some of them behind closed door. >> many of them will be private. they'll be submitting questions in writing and get that back. all of this will be made public. they've got their website finally up and running, as well. but no, they will not be in hearing settings like today's. >> here's my question about goldman. regardless of your view of

whether they needed the money, lloyd blankfein got all the questions. he's the person everybody's talking about and everyone's obsessed about goldman. that doesn't necessarily end up being a bad thing for a firm but it could. from just owning the stock perspective, is all of this excess i be focus and anger at lloyd blankfein and goldman sachs more than anybody else a risk. >> it's all about bonuses when it comes to goldman. should we be pursuing, david, great interviews, should we be pursuing the people who made money during this period and got it right, dimon an and goldman and lloyd or should we be going after it, aig, freddie may, i'd like to hear how they cost us money. goldman did profit from it. i think again raising what david said, dimon has actual deposits. we keep conflating goldman as if it were some sort of mom and pop small business lender that takes

our deposits. goldman is a financier. >> wait a minute, david, there are bank holding company. aren't they supposed to be taking deposits now. >> but they're not taking retail deposits or consumer deposits out of branches. jp morgan has 11% of all the deposits in the country. in one institution. jamie answered the question to his credit but it is certainly the larger question and one that continues to be asked. >> a lot of the frustration, jim, i hear your point. they made money. some people say okay, they made money last year because the fed kept interest rates at zero and gave them very, very cheap financing so they could get the government backing. it was on the back of taxpayers they were able to make all that money. so people still aren't satisfied. do you think they put any merit in that argument? >> i don't know. you know, it's hard to say whether or not ultimately that is something that's going to help them. goldman is going to continue to be in the crosshairs. a lot of it is compensation.

what's the number for blankfein and what's the route rage going to be? >> he should get 125, maybe $150 million. he should if you just look, if you look at the numbers. look, simon cowell is a total jerk and he gets $40 million. just to put it in the real world, remember, lloyd is simon cowell who is alex rodriguez. these are pinnacle players. do i think and i've said point blank i like the british system. the brits all back, every banker said they're going to go overseas. they're all panicked. that was a simple way to get back. everybody's been so right saying listen, why are we making it so the banks need to lend. slam the excise for anybody that took t.a.r.p. and made a big bonus. then we move forward. i will say and i happened to work at goldman and i regard lloyd blankfein as a good

acquaintance. dimon has been masterful at how he answers questions. dimon is like the community banker in monopoly. he's like i love the guy. it's incredible how he comes off. i want his agent. son of a gun, that guy is just money. >> you just made the point. jamie dimon sat down with you and had a conversation. some people may scoff at what he had to say. blankfein did not. >> blankfein had plenty to say and was perhaps a bit too verbose his handlers might say and got a little emotional. it is interesting, to jim's point. jpmorgan and goldman avoided the key risks that brought other firms to their knees. they both were the good actors, not the bad actors. >> isn't there irony here. >> there's a lot of people at jpmorgan who would say part of the reason they weren't involved is they frankly missed and tried

to get in and it was too late. >> but look, at some firms were dishonest, shouldn't we be grilling the people who were dishonest, not the people who played it right. >> yes, absolutely, jim, there's certainly plenty of questions to continue to be asked about the likes of aig that we don't really understand at this point. >> joe cassano from london more that inwant to hear from lloyd, right. >> that's a great point. >> first, let's bring in mary thompson. she has headlines on bank of america. mary? >> a source close to the bank that the cash portion of the bonuses paid to bark of america's investment banking employees will be cut to anywhere from 5 to 25%. it depends on where are you. junior bankers are see on average the cash portion of their bonus to be about 25%. senior bankers in a range of 5 to 10%. that's an average. the rest of the compensation they will receive will be in the form of either cash or stock and how much they get paid in that deferred compensation will

depend on the performance of bank of america stock going forward. the company's board is going to vote on this when they meet at the end of the month and again, the details are still being work the out. we don't know how that cash and stock portion of the deferred payments to the bankers is going to be laid out. that will be determined again ahead of the board meeting and then the board will vote on it at that time. keep in mind last year, bank of america, the majority of people who received a bonus received about oo% of it in cash in keeping with something the pay czar asked a number of the banks to do, ie limit the cash portion of any bonus given to their employees to an sideline the employees' interests more with that of the shareholder with having the majority of the bonuses linked to the stock price. >> mary, don't you think it's important to point out if you worked at bank of america you didn't make too much money and the issue isn't the huge profits, but the huge profits of goldman sachs and that it wasn't a banner year at bank of

america. >> no, it wasn't. the bank is expected to lose money in the fourth quarter. and for the full year as well although you know, there have been reports in the press that the bonus levels are supposed to be koes to where they were in 2007. the bank would argue we need this for retention purposes because some of these people might leave. that's the story with the bank of america bonuses. >> isn't it amazing, david you're familiar with the situation. you hear, they have liquidity concerns because of 2008 money. i worked at those places. when people i know worked at those places, had you big municipal bond accounts, a lot of money put away. these people always make me feel like this was their first year in the business. >> yeah, and how many star players are out there. how many of these people need to be retained because they are the top performers. >> easy come, easy go. >> that's why people get tru

frustrated. >> david raised a point that is so smart. these were sophisticated, these interviews were sophisticated, the panels. so the answers were actually substantive. >> it was fascinating. >> therefore, i think it moved the ball. >> thank you very much to both of you. they did a good job. david did. >> the best, are you kidding me. >> i can't believe he got those interviews. they had no reason to sit for those interviews. >> that's true. >> let me -- >> okay, thanks to david. jim's going to be back in a couple of moments. next, it's just about 3:30 in the morning in beijing, china, where we imagine all the employees of baidu are celebrating with fireworks their joy at the expense of an american icon. >> have to be pleased. >> that story is next.

hi, ellen! hi, ellen! hi, ellen! hi, ellen! we're going on a field trip to china! wow. [ chuckles ] when i was a kid, we -- we would just go to the -- the farm. [ cow moos ] [ laughter ] no, seriously, where are you guys going? ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! ni hao! [ female announcer ] the new classroom. see it. live it. share it. on the human network. cisco.

so we got up and walked over

to the stop trading segment. >> i find that stuff fascinating with faber. there are real issues here. now, do i think such and such a stock is cheap, that's what i do on "mad money." >> this is an issue people care about. >> talk about sophisticatedly. >> i think the president is offering a very unfoe fis indicated solution. i think he should have listened to the testimony and realized these people are not small time bankers ripping off the government. you know what, this is a way to get a lot of votes. i'm not in politics, i'm in business. i got to tell you, there's no better way to get a lot of votes than to sock it to them even if you think it's wrong. >> so let, let's talk about a few things here. i said before the break and we have a special reporting coming up, jim gold ha is has a very good report. this google baidu situation. google saying they're getting hacked and may have to leave. sure, that may be part of it. they've not done so well in china. they stayed in with the

censorship and -- baidu, there was a story they were going to preannounce to the downside or guide down. it's not just the usual short squeeze. there were people pressing the baidu bed betting that literally today or tomorrow would be the days that they were going to blow up. you really see that market cap. you can't take the billions of dollars added to baidu and subtracted from google but people were doing that at one point today. >> what is google's bet, that the chinese government will say we don't like hacking. >> china comes out against hacking and says, they're going to come out against hacking. >> it's all a pr move. >> i think so. people are putting between 30 and 50% chance google is i can kicked out. obviously, there's worth. this is not a positive for google. it may be a pr positive. >> half a billion dollars in revenue a year from china. you're saying it is significant. >> i think one, it's not a done

deal. and two, let's not forget it is not a big market right now for them. it will be a big market. i am worried but i am not a sell here. google has been acting doggy for days. it's entirely possible this story was out there and people had already sold the stock in the know. i'm not saying that's insider information. you can't get inside information from the china government, you know what i mean? i do believe that google is -- could be even done going down and should have been bought when it was down a lot today. >> you would buy google acknowledging there's some risk. coming out of china full time is bad but you're betting it won't happen. >> that in the end of the gooez government doesn't say we don't care about privacy or care about anything. the chinese government can do whatever they want. it would be binary. google is in or out. that is a cause of concern for anyone who owns google. i am not a seller here. >> would you short baidu? >> no, this is a very thin float

stock. >> right. >> trades on the nasdaq. >> this is a nasty one. and if i own it had, i would take profits in it, but you know, shortened kind of stock like this is the kind of things where it's a career ender. i would never recommend that. >> time for one more shadow inventory. you don't like the home builders. >> right remember, i think that i have said that beginning june 30th, house prices have stabilized. we just got nice numbers out of vegas. it's important to remember stabilization you should go buy the home builders. what it does say to me and doug cas and i were kicking this around. shadow inventory belong to the servi servicers, not the banks. kph says they don't see shadow inventory in their markets. it's not an issue.

we can talk about it forever but it's no an issue. house prices have stabilized in the country. that's the story we get. unemployment down, house prices begin to go up and this problem will go away which is why the bank stocks are doing well even though they're in the red hot griddle. >> check out the beige book when they talk about terms of home buying. thanks so much to jim and jim tonight 6:00 and 11:00 on "mad money." next on this show, the apple trade on the worry that google may pretend to dump -- >> i wanted to do that one. he's good. >> but jim goldman has his particular trade. maybe it will conflict with yours. that's coming up. we'll be right back. what are you doing...? calling chase sapphire,

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so, is google getting out of china in the search behemoth says it came under attack in the world's most pop lue u las country. is that what's going on?

jim goldman has the story full of intrigue and excitement. >> there's a lot of angles. and it's getting better and bet per.google is walk agdiplomatic and political tight rope. taking the moral high ground even if it means putting china's business at risk comes with very little downside. it's been operating in china since 2006. abandoning the market might seem like a huge loss. consider it controls only 17% of the search market there. abandoning china would mean maybe a 1% knock on the bottom line. the google of china is actually baidu, soaring on the possibility that google might pull out. google says between censorship and cyberattacks the risks far outweigh any financial rewars. >> as we said when we entered china, if it got more difficult to operate there, if we were faced with laws or restrictions that made us believe that we

could not operate there in accordance with our values, we would shift gears and we're are prepared to do that. >> google can now count yahoo! with its own deep troubles in china as an ally. adobe by 2 confirmed it was one of 20 companies suffering attacks and they were significant. >> it strikes me, frankly it's one of the most brazen attempts to muck around in the business of an iconic foreign company that i can remember. it also sends a signal that if they have these capabilities to attack google's infrastructure, what else could they do in cyberwarfare, for example? >> talk about sobering. another angle in all this apple as it tries to crack the chinese market. google's tension with the chinese government could hurt androids's penetration there.

giving possibly iphone a lift. it's certainly a search and e-mail story today but quickly and easily could become a smart phone story tomorrow. there's more on the blog tech check.cnbc.com. >> thank you very much. they're all going to be tired from the fireworks celebration. thanks, jim. and next, another side to the haiti tragedy. one quarter of haiti's economy ares on people like you our viewers and that is at risk. we have that side of the story here next. right now 1.2 million people are on sprint mobile broadband. 31 are streaming a sales conference from the road. 154 are tracking shipments on a train. 33 are iming on a ferry. and 1300 are secretly checking email on vacation. that's happening now. america's most dependable 3g network. bringing you the first and only wireless 4g network. right now get a free 3g/4g device for your laptop. sprint. the now network. deaf, hard-of-hearing and people with speech disabilities access www.sprintrelay.com. ♪

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all u.s. airlines suspending operations in haiti after last night's devastating earthquake. no one knows when they'll resume but the runway if thefation's capital was damaged and the crisis could get worse as heim goes on. one-quarter of the nation's economy relies on tourism. hotels and restaurants. peter shazazo is from the center for strategic and international studies. we appreciate your being with us. when we talk about haiti, obviously, it's a nation that has been in economic crisis for

a long time. two-thirds of the country's workforce is unemployed. 80% of people in haiti survive on less than $2 a day. but tourism was really the only sort of big industry that there was, right? >> well, tourism, tourism was gaining in importance there. other industries that were growing up. the export of apparels, electronic components, but these were relatively a small percentage of gnp. the real key factors in the economy are support from support from international donors, the international community, charitable contributions and remittances from outside. and so the haitian economy is very dependent on outside inputs. >> obviously, in terms of donors and charitable donations there will be i would imagine, a flood of that coming in in the near term. but in order for the economy to get on its feet and in order to

have this crisis end up being an opportunity for the country, the economy to stand on its own two from here? i mean especially when you look at choice hotels, for example, was about this week to break ground in a hotel in haiti and they were unable to update us today on whether they were going to go ahead with those plans ever. >> well, this, of course, sets back the entire haitian economy. first of all, it's a humanitarian crisis with large proportion. secondly, the amount of destruction to infrastructure, which was pretty weak anyway and needed an enormous amount of improvement, the security situation is going to be further challenged by -- by the earthquake and its consequences. so an enormous amount of emergency aid needs to go in right away. and then to start rebuilding an economy that was already very weak. >> do you think there's a chance, peter, when -- i don't know how long it would take, and

i would presume a very long period of time -- but it's a nation that has had no economy and been in crisis for a long time. is it possible that this could be the opportunity? for, when we come out on the other side, that it actually changes? >> well, this -- if this is seen as simply another -- another means for the international community to continue to rally around haiti. since about 2004 there had been a determination by the united nations and by the international community in general, that they were going to make a sustained effort at trying to develop haiti as a functioning state and as a functioning economy. and that this is going to have to be -- it was going to have to be a long-term effort. they were going to have to put in substantial resources and maintain them over a long period of time. and i think the earthquake only underscores the need for that sustainability in the congress to support haiti is going to get and sneeds peter, thank you very much. we appreciate you're taking the time to with, with us. >> thank you.

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welcome back to "street signs." i'm diana olick in washington. mortgage applications rose 14% last week. largely driven by a 22% surge in refis. the purchase index advanced slightly. . %. the four-week moving average down 4.6%. investing for morgan stanley. john clock recently the ceo of capital trust which he cofounded with sam zell. tomorrow realty check out with its foreclosure report, just how bad the numbers will be? check out next tomorrow morning at 11:50. erin? >> thank you very much, diana. now a case that could change, not only football, but the way all professional sports leagues do business heads to the supreme court. darren rovell is there. >> reporter: erin, it started out real simple. american nido. a hat manufacturer that had the

rights to market nfl logos was shut out of that business in 2001 when the league granted an exclusive right to the reebok and they sued saying they violated antitrust laws. the thinking 32 separate teams and 32 separate businesses and shouldn't be able to act as one. the point of view expressed by eye lawyer representing american needle in front of american supreme court justices this morning. a lawyer for the nfl saying while the teams played against each other the league for decades have overseen team trademarks and can operate as a single entity. erin, the reason this was a big case is there was a thought that they could grant, the justices, could eventually grant an exemption. an antitrust exemption broadly to the nfl. meaning, they could fix salaries. meaning they could fix ticket prices after hearing what we did today it doesn't seem like that will happen and in that case it doesn't mean -- it means that this case is not as big as originally thought. back to you. >> all right, thanks very much, darren. we'll be right back but first your "trend of the day."

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